Category Archives: Money

Death and Taxes

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Photo by Morgan Housel on Unsplash

“Compound interest is the most powerful force in the universe.” — Albert Einstein

In the video game Civilization this quote is voiced when a player wins the Economics technology. Although the game attributes this quote to Einstein, there is no proof that he actually said it. I think that this game does this because as one of the fathers of modern atomics, him saying this makes it seem more powerful than simply counting coin.

Yesterday, we Zoomed with our financial advisor to discuss tax planning. With our own approaching decrepitude, we had some questions about taxes. The majority of our savings are in taxed deferred accounts. This is an investment vehicle that was designed to generate retirement savings and pay for the Reagan tax cuts, but when you meet retirement age there is a Required Minimum Distribution (RMD) that must be taken and then paid taxes on. We are at the cusp of that age. For all of our adult lives, we have been good little savers, but now it is time to spend that money, or at least pull it out of our tax deferred accounts and pay taxes on that withdrawal. Our motive for calling this meeting was to minimize our tax pain in this process.

Eric, our financial advisor had called in Jerome, an out-of-town expert to help advise us. Good thing, because unlike Jerome, whose animated image appeared after we logged into the meeting, Eric was represented by an avatar. Turns out Eric had suffered a softball injury and had his jaw wired shut, and he did not want us to see his current condition. That’s OK, Jerome was more than capable of handling the meeting. Our first question and the one that end up dominating the meeting was, does a Roth conversion make sense for us?

Let’s cut to the chase. The short answer is no, because we are now too old. When you do a Roth conversion there is a loss, but you hope to make up for that loss over time. Our problem is that at our ages, we do not have enough time left. We would need another thirty years, which if we had our fathers’ longevity then we could do it, but if we ended up with our mother’s, we would lose money. So, we will be keeping the horse that we rode in on and not converting our tax deferred investments. Long story short there are two things that are unavoidable in life, death and taxes and we’ll be facing one or the other eventually.

The Reviews Are In…

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Photo by Nik on Unsplash

And they are all one-star bad. Apparently, this was the point of last week’s Amazon brushing incident, to dirt on the competitors. Why would anyone want to but this crap? I mean the fake reviews, not the actual products. To remind the casual reader, last week, I was subjected to a “brushing” attack on Amazon. Someone bought half-a-dozen items in my name. They were all useless things, at least to me, so I promptly returned them all. An Amazon gift card was used to spend the almost $200 and all of that money is now credited to my account. Since then, I have received notices that I have one-star reviewed everything. I filed a complaint for the lot of them and have received an automated response saying that they will look into it. Further investigation revealed that these spammers had been mucking about in my account for weeks. I have no idea if this will continue. I supposed that I should put out one of those send to all emails, telling everyone to disregard any of my reviews, but that seems pointless. I’m no influencer and I have no brand to protect. The business model for this e-commerce attack is still a mystery to me, but at least I got paid.

Good For One Fare

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Pictured is a coin that reads Good for One Fare, on one side and United Electric Railways Company on the other. UER was a public transit provider in Providence, RI. A distinctive feature o this token is the star-shaped cutout in its center. These coins represent a bygone era of public transportation when physical tokens were commonly used instead of modern electronic payment methods like smart cards or mobile apps.

Anne was going through old coin jars when she found this token. She also found numerous other old coins that were typically going for a few bucks on eBay, when she found a 1911 Canadian penny. Looking that coin up, one of the entries came back at $100,000. Momentarily she thought that she had struck it rich, but that valuation was for a special, limited test run and not the coin in her hand. Still, per eBay $3 represents an increase of 30,000%.

Only a few more days remain until our departure east. My goal is to leave the house in a state that in showable. Exterior power washing today, with windows to follow after our departure and hopefully a deep cleaning after that. What we cannot ling in the next couple of days, will go into closets to hide until after the showing. Other than the pile of stuff waiting at the front door to go out, sheets over furniture and art for sun protection and the primary bedroom, things are looking good. We still have a lot more stuff to fling or sort, but overall things are looking good. We might actually be able to sell this place yet.

Money, Lawyers, Money

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American Law

We met with the estate lawyer, where I signed a bunch of paperwork and we paid him a bunch of money. I have to get a couple of bank accounts setup, to funnel the estate’s money through. We got a response from one of the auction houses that I had reached out to. It was interesting, some good, some bad. I am mostly pleased with the level of their interest. I was beginning to believe that the only place that was interested in any of my parent’s stuff was Goodwill. We went to Home Depot and got a bunch of packing supplies. Let the chaos begin!

The law books were my maternal grandfather Frank’s. Inside one of them was the pictured 10 Yen note. This money came from Frank’s sister, my Great Aunt Alice, who was a nurse in the American army of occupation after the war. It is Japanese military script, possibly from World War II. These notes were originally issued to soldiers of the Imperial Japanese Army. These military yen notes were distinct from the regular Japanese yen used in commerce. They were used in occupied territories and by the military. The notes were part of a broader system of military currencies issued by Japan during the war. After the war, some Allied Military Currency was issued for use in occupied Japan, including 10-yen notes. These notes often had similar designs to the Japanese military yen for ease of production. Today, these notes are primarily of interest to collectors as historical artifacts. They represent history and offer a connection to the past.  

WW II Japanese Military Script – 10 Yen

Tax Season

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Tax Man – Photo by Jon Tyson on Unsplash

Yesterday, I got our taxes done. It took less than an hour. We have to pay more to the Feds. Got to pay for all those new tax cuts for the rich. We do get money back from the state, so that the net turned out pretty close to zero. Anyway, its done. I try to get our taxes done early to help avoid identity theft. I don’t know how effective a strategy this really is, except there have been no problems so far. For me, tax season begins when all the W-2s and 1099s have arrived, which they did last Saturday. I used TurboTax, because I always have. It is sort of force of habit now. I do not like paying taxes. Who does? But I understand the necessity of it. Unlike certain billionaires. Tesla paid no taxes last year. Now, between Social Security and Medicare, we are getting a return on our decades of investment. I do not care to see it stolen by a bunch of rich dudes, who only want to become richer. All at my expense.

Livin’ la Vida Loca

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American Stock Exchange

Next month, my bride will be a septuagenarian and she will begin drawing on her social security. She has waited until now to begin taking this retirement benefit, much to my consternation. I quit work at 62 but waited until my full retirement age to begin receiving social security checks. I thought Anne should do the same, but she did not. Instead of beginning at 66 and 2 months, she has waited until now. We are about to enjoy the fruits of her patience. Her benefit will now be roughly the same as mine. If she had begun drawing social security at her full retirement age, her benefit would have been little more than half of mine. She will enjoy the 8½% per year raise that has been further compounded by cost-of-living increases. With inflation those have been hefty as of late. Her patience is its own reward. This new revenue stream will flip the equation on how we support ourselves. Up until now, we have primarily relied upon our savings, but going forward, social security will become the biggest contributor. These financial sea changes will roil our taxes. This last year we got burnt by poor tax planning; I hope going forward to avoid any further such consequences.